nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2020‒03‒16
twenty-six papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Income Distribution and the Fear of Crime: Evidence from Germany By Michelle Acampora; Conchita D'Ambrosio; Markus M. Grabka
  2. The heterogeneous impact of market size on innovation: evidence from French firm-level exports By Aghion, Philippe; Bergeaud, Antonin; Lequien, Matthieu; Melitz, Marc
  3. Retirement, Intergenerational Time Transfers, and Fertility By Eibich, Peter; Siedler, Thomas
  4. Inequalities in student to course match: evidence from linked administrative data By Campbell, Stuart; Macmillan, Lindsey; Murphy, Richard; Wyness, Gill
  5. Ranking populations in terms of Inequality of health opportunity: A flexible latent type approach By Paolo Brunori; Caterina Francesca Guidi; Alain Trannoy
  6. Class Size Effects in Higher Education: Differences across STEM and Non-STEM Fields By Kara, Elif; Tonin, Mirco; Vlassopoulos, Michael
  7. The Effects of Student Composition on Teacher Turnover: Evidence from an Admission Reform By Karbownik, Krzysztof
  8. Understanding day care enrolment gaps By Jessen, Jonas; Schmitz, Sophia; Waights, Sevrin
  9. Children's socio-emotional skills: Is there a quantity-quality trade-off? By Simon Briole; Hélène Le Forner; Anthony Lepinteur
  10. The Evolution of Inequality of Opportunity in Germany: A Machine Learning Approach By Paolo Brunori; Guido Neidhofer
  11. Short- vs Long-Term Intergenerational Correlations of Employment and Self-Employment in Europe By Gimenez-Nadal, J. Ignacio; Molina, José Alberto; Velilla, Jorge
  12. Do Corrupt Local Governments Inhibit Entrepreneurship? A Contextual Analysis of Start-Ups in Swedish Municipalities By Wittberg, Emanuel; Erlingsson, Gissur
  13. A Broken Social Elevator? Employment Outcomes of First- and Second-generation Immigrants in Belgium By Piton, Céline; Rycx, François
  14. The Cultural Origin of Saving Behavior By Costa-Font, Joan; Giuliano, Paola; Ozcan, Berkay
  15. Wage Inequality in Germany after the Minimum Wage Introduction By Bossler, Mario; Schank, Thorsten
  16. Work Environment and Competition in Swedish Schools, 1999-2011 By Sebhatu, Abiel; Wennberg, Karl; Lakomaa, Erik; Brandén, Maria
  17. Positive Spillovers from Negative Campaigning By Vincenzo Galasso; Tommaso Nannicini; Salvatore Nunnari
  19. Who Benefits from General Knowledge? By Bellés Obrero, Cristina; Duchini, Emma
  20. Economic Insecurity and the Rise of the Right By Walter Bossert; Andrew E. Clark; Conchita D'Ambrosio; Anthony Lepinteur
  21. Upper and lower bound estimates of inequality of opportunity: A cross-national comparison for Europe By Rafael Carranza
  22. Dissecting Between‐Plant and Within‐Plant Wage Dispersion: Evidence from Germany By Baumgarten, Daniel; Felbermayr, Gabriel; Lehwald, Sybille
  23. The Wealth of Parents: Trends over Time in Assortative Mating Based on Parental Wealth By Wagner, Sander; Boertien, Diederik; Gørtz, Mette
  24. Do Immigrants Make Us Safer? Crime, Immigration, and the Labor Market By Thomas Bassetti; Luca Corazzini; Darwin Cortes; Luca Nunziata
  25. Wage Setting and Unemployment: Evidence from Online Job Vacancy Data By Oleksandr Faryna; Tho Pham; Oleksandr Talavera; Andriy Tsapin
  26. A Window to the World: The long-term effect of Television on Hate Crime By Endrich, Marek

  1. By: Michelle Acampora (AFFILIATION); Conchita D'Ambrosio (Universite du Luxembourg); Markus M. Grabka (DIW)
    Abstract: We here explore the link between individual concerns about crime and the distribution of income in Germany. We make use of 1995-2017 microdata from the German Socio-Economic Panel (SOEP) to show that both individual polarization and relative deprivation have statistically-significant effects on reported concerns about crime, while relative satisfaction plays no role. At the aggregate level, the main driver is equally income polarization, whereas the standard measure of inequality, the Gini index, plays no significant role.
    Keywords: Concerns about crime, deprivation, inequality, polarization, SOEP.
    JEL: I31 I32 D60
    Date: 2020–02
  2. By: Aghion, Philippe; Bergeaud, Antonin; Lequien, Matthieu; Melitz, Marc
    Abstract: We analyze how demand conditions faced by a firm impacts its innovation decisions. To disentangle the direction of causality between innovation and demand conditions, we construct a firm-level export demand shock which responds to aggregate conditions in a firm’s export destinations but is exogenous to firm-level decisions. Using exhaustive data covering the French manufacturing sector, we show that French firms respond to exogenous growth shocks in their export destinations by patenting more; and that this response is entirely driven by the subset of initially more productive firms. The patent response arises 3 to 5 years after a demand shock, highlighting the time required to innovate. In contrast, the demand shock raises contemporaneous sales and employment for all firms, without any notable differences between high and low productivity firms. We show that this finding of a skewed innovation response to common demand shocks arises naturally from a model of endogenous innovation and competition with firm heterogeneity. The market size increase drives all firms to innovate more by increasing the innovation rents; yet by inducing more entry and thus more competition, it also discourages innovation by low productivity firms.
    Keywords: innovation; export; demand shocks; patents
    JEL: D21 F13 F14 F41 O30 O47
    Date: 2019–10
  3. By: Eibich, Peter (DIW Berlin); Siedler, Thomas (University of Hamburg)
    Abstract: Retired parents might invest time into their adult children by providing childcare. Such intergenerational time transfers can have important implications for family decisions. This paper estimates the effects of parental retirement on adult children's fertility. We use representative panel data from Germany to link observations on parents and adult children. We exploit eligibility ages for early retirement for identification in a regression discontinuity design. The results show that parent's early retirement significantly increases the probability of childbirth for adult children. However, parental retirement affects only the timing of adult children's fertility, without having an effect on total fertility.
    Keywords: retirement, fertility, intergenerational transfer, time use
    JEL: J13 J14 J22 J26
    Date: 2020–02
  4. By: Campbell, Stuart; Macmillan, Lindsey; Murphy, Richard; Wyness, Gill
    Abstract: This paper examines inequalities in the match between student quality and university quality using linked administrative data from schools, universities and tax authorities. We analyse two measures of match at the university-subject (course) level, based on student academic attainment, and graduate earnings. We find that students from lower socio-economic groups systematically undermatch for both measures across the distribution of attainment, with particularly stark socio-economic gaps for the most undermatched. While there are negligible gender gaps in academic match, high-attaining women systematically undermatch in terms of expected earnings, largely driven by subject choice.
    Keywords: higher education; educational economics; college choice; mismatch; undermatch
    JEL: I22 I23 I28
    Date: 2019–08
  5. By: Paolo Brunori (University of Florence); Caterina Francesca Guidi (European University Institute); Alain Trannoy (Aix-Marseille University)
    Abstract: We offer a flexible latent type approach to rank populations according to unequal health opportunities. Building upon the latent-class method proposed by Li Donni et al. (2015), our contribution is to let the number of types vary to obtain an opportunity-inequality curve for a population that gives how the between-type inequality varies with the number of types. A population A is said to have less inequality of opportunity than population B if its curve is statistically below that of population B. This version of the latent class approach allows for a robust ranking of 31 European countries regarding inequality of opportunity in health.
    Keywords: nequality of opportunity, health inequality, latent class, opportunity-inequality curve, self-assessed health.
    JEL: I14 D63
    Date: 2020–01
  6. By: Kara, Elif (Bursa Uludag University); Tonin, Mirco (Free University of Bozen/Bolzano); Vlassopoulos, Michael (University of Southampton)
    Abstract: In recent years, many countries have experienced a significant expansion of higher education enrolment. There is a particular interest among policy makers for further growth in STEM subjects, which could lead to larger classes in these fields. This study estimates the effect of class size on academic performance of university students, distinguishing between STEM and non-STEM fields. Using administrative data from a large UK higher education institution, we consider a sample of 25,000 students and a total of more than 190,000 observations, spanning six cohorts of first-year undergraduate students across all disciplines. Our identification of the class size effects rests on within student-across course variation. Overall, we find that larger classes are associated with significantly lower grades (effect size of -0.04) and the effect varies across academic fields, with no effect in non-STEM fields, and a large effect in STEM fields (-0.08). We further explore the heterogeneity of the effect along the dimensions of students' socio-economic status, ability, and gender, finding that in STEM disciplines smaller classes appear to be particularly beneficial for students from a low socio-economic background, with higher attainment in A-levels and to male students.
    Keywords: class size, higher education, student academic performance, STEM
    JEL: I21 I23 I28
    Date: 2020–02
  7. By: Karbownik, Krzysztof (Emory University)
    Abstract: This paper examines the effects of student ability on teacher turnover using data from Stockholm high schools and an admission reform that led to the exogenous reshuffling of pupils. The results indicate that a 10-percentile-point increase in student credentials decreases the probability of a job separation by up to 10 percentage points. These effects vary somewhat across different groups of teachers and are found mainly for mobility between schools rather than out of the profession. Teachers react most strongly to direct measures of student ability, grades from compulsory school, rather than to other correlated characteristics such as immigrant origin or parental income.
    Keywords: teacher mobility, student ability, school choice
    JEL: I2 J2 J63
    Date: 2020–01
  8. By: Jessen, Jonas; Schmitz, Sophia; Waights, Sevrin
    Abstract: We document day care enrolment gaps by family background in a country with a universal day care system (Germany). Research demonstrates that children of less educated or foreign-born parents can benefit the most from day care, making it important to understand why such enrolment gaps exist. Using a unique data set that records both stated demand and actual usage of day care we demonstrate that differences in demand cannot fully explain the enrolment gaps. Investigating supply-side factors using quasi-experimental designs, we find that reducing both parental fees and scarcity of places significantly decreases enrolment gaps by parental education but not by parental country of birth. We discuss implications for policy.
    Keywords: child care; early education; inequality; socio-economic status; discrimination; synthetic control
    JEL: J13
    Date: 2019–09
  9. By: Simon Briole ((Paris School of Economics); Hélène Le Forner (Aix-Marseille Univ, CNRS, EHESS, Ecole Centrale, AMSE, Marseille, France); Anthony Lepinteur (University of Luxembourg)
    Abstract: Although it is widely acknowledged that non-cognitive skills matter for adult outcomes, little is known about the role played by family environment in the formation of these skills. We use a longitudinal survey of children born in the UK in 2000-2001, the Millennium Cohort Study by the Centre for Longitudinal Studies, to estimate the effect of family size on socio-emotional skills, measured by the Strengths and Difficulties Questionnaire. To account for the endogeneity of fertility decisions, we use a well-known instrumental approach that exploits parents' preference for children's gender diversity. We show that the birth of a third child negatively affects the socio-emotional skills of the first two children in a persistent manner. However, we show that this negative effect is entirely driven by girls. We provide evidence that this gender effect is partly driven by an unequal response of parents' time investment in favour of boys and, to a lesser extent, by an unequal demand for household chores.
    Keywords: non-cognitive skills; family size; birth order; child development
    JEL: I20 J13 J16
    Date: 2020–03
  10. By: Paolo Brunori (University of Florence); Guido Neidhofer (ZEW)
    Abstract: We show that measures of inequality of opportunity (IOP) fully consistent with Roemer (1998)'s IOP theory can be straightforwardly estimated by adopting a machine learning approach, and apply our novel method to analyse the development of IOP in Germany during the last three decades. Hereby, we take advantage of information contained in 25 waves of the Socio-Economic Panel. Our analysis shows that in Germany IOP declined immediately after reunification, increased in the first decade of the century, and slightly declined again after 2010. Over the entire period, at the top of the distribution we always find individuals that resided in West-Germany before the fall of the Berlin Wall, whose fathers had a high occupational position, and whose mothers had a high educational degree. East-German residents in 1989, with low educated parents, persistently qualify at the bottom.
    Keywords: Inequality, opportunity, SOEP, Germany.
    JEL: D63 D30 D31
    Date: 2020–01
  11. By: Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza); Velilla, Jorge (University of Zaragoza)
    Abstract: This paper analyzes the existence of short- and long-term intergenerational correlation of employment and self-employment in European countries, using data from the European Union Statistics on Income and Living Conditions. Using longitudinal data for the period 2003-2016, fixed effect estimates show a significant short-term correlation between the current employment status of parents and that of their children. However, short-term correlation of self-employment seems to be driven only by father-son correlations. Conversely, using the special module on Intergenerational Transmissions for the year 2011, estimates show a strong and significant correlation between respondents' self-employment status, and that of their parents when respondents were 14 years old. This suggests that self-employment decisions are not related to short-term family labor supply decisions, but to long-term intergenerational transmission.
    Keywords: short- and long-term, Intergenerational transmissions, employment, self-employment, EU-SILC data
    JEL: J62 E24
    Date: 2020–01
  12. By: Wittberg, Emanuel (Institute for Analytical Sociology); Erlingsson, Gissur (Centre for Local Government Studies)
    Abstract: Does corruption affect the incentives for potential entrepreneurs to start businesses? The traditional view holds that entrepreneurship is inhibited. However, a few recent studies indicate the contrary, supporting a ‘grease the wheels’ perspective. In a novel approach to this question, we combine a local government corruption index and individual-level register data on start-ups in a low-corruption setting: Sweden. We disaggregate the analysis to individual entrepreneurs, focus on corruption in local institutions and hypothesize that local corruption deters potential entrepreneurs. Our findings are twofold. First, rejecting the ‘grease the wheels’ hypothesis, local corruption has a strong local deterring effect on potential entrepreneurs. Second, a minority of entrepreneurs relocate their start-ups from home unicipalities to elsewhere. However, contrary to expectations, relocaters could embody ‘non-productive’ or ‘destructive’ entrepreneurship: they migrate from relatively low-corrupt to relatively high-corrupt municipalities. While migrating is uncommon, and the effect is weak, it nonetheless indicates that relocaters are attracted to conditions where rent-seeking opportunities are present.
    Keywords: Entrepreneurship; Start-ups; Corruption; Local government; Destructive entrepreneurship
    JEL: D73 L26
    Date: 2020–03–09
  13. By: Piton, Céline; Rycx, François
    Abstract: This paper provides a comprehensive quantitative assessment of the employment performance of first- and second-generation immigrants in Belgium compared to that of natives. Using detailed quarterly data for the period 2008-2014, we find not only that first-generation immigrants face a substantial employment penalty (up to -36% points) vis-à-vis their native counterparts, but also that their descendants continue to face serious difficulties in accessing the labour market. The social elevator appears to be broken for descendants of two non-EU-born immigrants. Immigrant women are also found to be particularly affected. Among the key drivers of access to employment, we find: i) education for the descendants of non-EU-born immigrants, and ii) proficiency in the host country language, citizenship acquisition, and (to a lesser extent) duration of residence for first-generation immigrants. Finally, estimates suggest that around a decade is needed for the employment gap between refugees and other foreign-born workers to be (largely) suppressed.
    Keywords: First- and second-generation immigrants,employment,moderating factors
    JEL: J15 J16 J21 J24 J61
    Date: 2020
  14. By: Costa-Font, Joan (London School of Economics); Giuliano, Paola (University of California, Los Angeles); Ozcan, Berkay (London School of Economics)
    Abstract: Traditional economic interpretations have not been successful in explaining differences in saving rates across countries. One hypothesis is that savings respond to cultural specific social norms. A seminal paper in economics (1) however did not find any effect of culture on savings. We revisit this evidence using a novel dataset, which allows us to study the saving behavior of up to three generations of immigrants in the United Kingdom. Against the backdrop of existing evidence, we find that cultural preferences are an important explanation for cross-country differences in saving behavior, and their relevance persists up to three generations.
    Keywords: saving, culture
    JEL: Z1 D0
    Date: 2020–02
  15. By: Bossler, Mario (Institute for Employment Research (IAB), Nuremberg); Schank, Thorsten (University of Mainz)
    Abstract: We revisit the development of monthly wages in Germany between 2000 and 2017. While wage inequality strongly increased during the first years of this period, it recently returned to its initial level, raising the question what the role of the German minimum wage introduction for this reversal is. We identify effects of the minimum wage from difference-in-differences based on unconditional quantile regressions applied to German administrative employment data. The results show significant wage effects of varying magnitudes along the lower half of the wage distribution. Employment dynamics do not explain effects along the wage distribution, implying strong wage increases among the existing workforce. The increased individual labor income is not offset by decreasing social benefits. Overall, the introduction of the minimum wage can account for about half of the recent decrease in wage inequality.
    Keywords: wages, inequality, minimum wage, Germany
    JEL: J31 J38
    Date: 2020–02
  16. By: Sebhatu, Abiel (Linköping University); Wennberg, Karl (The Ratio Institute); Lakomaa, Erik (Stockholm School of Economics); Brandén, Maria (Linköping University)
    Abstract: Research on schools’ work environment highlights socioeconomic conditions (SES) as primary drivers of work environment, but evidence to date is primarily limited to cross-sectional samples. Research on school competition has revealed important effects on educational outcomes, but effects on work environment are largely unknown. We bridge these literatures by studying the work environment in all Swedish junior high schools and high schools using detailed data on complaints and incidences of disorder, including violence. Comparing educational levels to gauge differences in degree of choice made possible by competition, we overall find more adverse work environment in junior high schools facing stronger school competition and with many low-SES students in either the school or the region. Conversely, we find better work environment in high schools facing stronger school competition, and in high schools with a large share of students with foreign background. To assess causal effects of competition on work environment we compare regions that introduced competition versus those that have not in a difference-in-difference framework. In such regions only complaints in high schools decrease after competition is introduced. We highlight the importance of including multiple measures of both competition and work environment.
    Keywords: School competition; work environment; independent schools; public schools; voucher
    JEL: H40 I21 J28
    Date: 2020–03–05
  17. By: Vincenzo Galasso; Tommaso Nannicini; Salvatore Nunnari
    Abstract: Negative advertising is frequent in electoral campaigns, despite its ambiguous effectiveness: negativity may reduce voters’ evaluation of the targeted politician but have a backlash effect for the attacker. We study the effect of negative advertising in electoral races with more than two candidates with a large scale field experiment during an electoral campaign for mayor in Italy and a survey experiment in a fictitious mayoral campaign. In our field experiment, we find a strong, positive spillover effect on the third main candidate (neither the target nor the attacker). This effect is confirmed in our survey experiment, which creates a controlled environment with no ideological components nor strategic voting. The negative ad has no impact on the targeted incumbent, has a sizable backlash effect on the attacker, and largely benefits the idle candidate. The attacker is perceived as less cooperative, less likely to lead a successful government, and more ideologically extreme.
    Keywords: electoral campaign, political advertisement, randomized controlled trial, field experiment, survey experiment
    JEL: D72 C90 M37
    Date: 2020
  18. By: Francesco Crespi; Serenella Caravella
    Abstract: The study focuses on the impact exerted on private R&D expenditures by regular and innovative public procurement when taken in combination or insolation with supply-push measures. The econometric analysis relies on a pulled sample of 4,206 Italian manufacturing firms observed between 2010-2014. The empirical exercise confirms previous evidences on the relevance of technology-push instruments in sustaining firms’ innovativeness. On the contrary, the ability of public procurement activities in shaping innovative investments is found to depend on a number of instances related to: i) the adoption of contemporaneous supply side measures; ii) the inclusion of innovative demand in procurement contracts. The analysis provides important suggestions with respect to the potential effectiveness of demand-side tools when implemented in weak administrative and innovation systems, as in the Italian case. Moreover, it is shown that the design of the policy mix matters, and its effectiveness improves when demand-side and supply-side instruments are jointly implemented.
    Keywords: Demand-pull policies, Public Procurement, Policy-mix, Non-parametric analysis.
    JEL: H57 O25 O38
    Date: 2020–02
  19. By: Bellés Obrero, Cristina (University of Mannheim); Duchini, Emma (University of Warwick)
    Abstract: While vocational education is meant to provide occupational-specific skills that are directly employable, their returns may be limited in fast-changing economies. Conversely, general education should provide learning skills, but these may have little value at low levels of education. This paper sheds light on this debate by exploiting a recent Spanish reform that postpones students' choice between these two educational pathways from age 14 to 16. To identify exogenous changes in its staggered implementation, we instrument this with the pre-reform across-province variation in the share of students in general education. Results indicate that, by shifting educational investment from vocational to general education after age 16, the reform improves occupational outcomes, and results in a significant rise in monthly wages. The effects are larger after the financial crisis, but are concentrated among middle to high-skilled individuals. In contrast, those who acquire only basic general education have worse long-term employment prospects than vocationally-trained individuals.
    Keywords: general versus vocational education, heterogeneous returns, financial crisis
    JEL: I26 I28 J24
    Date: 2020–02
  20. By: Walter Bossert (Department of Economics and CIREQ, University of Montreal); Andrew E. Clark (Paris School of Economics); Conchita D'Ambrosio (INSIDE, University of Luxembourg); Anthony Lepinteur (INSIDE, University of Luxembourg)
    Abstract: Economic insecurity has attracted growing attention in social, academic and policy circles. However, there is no consensus as to its precise definition. Intuitively, economic insecurity is multi-faceted, making any comprehensive formal definition that subsumes all possible aspects extremely challenging. We propose a simplified approach, and characterize a class of individual economic-insecurity measures that are based on the time profile of economic resources. We then apply our economic-insecurity measure to data on political preferences. In US, UK and German panel data, and conditional on current economic resources, economic insecurity is associated with both greater political participation (support for a party or the intention to vote) and notably more support for parties on the right of the political spectrum. We in particular find that economic insecurity predicts greater support for both Donald Trump before the 2016 US Presidential election and the UK leaving the European Union in the 2016 Brexit referendum.
    Keywords: Economic index numbers; Insecurity; Political participation; Conservatism; Right-leaning political parties; Trump; Brexit.
    JEL: D63 D72 I32
    Date: 2020–01
  21. By: Rafael Carranza (London School of Economics)
    Abstract: I provide lower and upper bound estimates of inequality of opportunity (IOp) for 24 European countries, between 2005 and 2011. Previous estimates of IOp are lower bounds of its true level and provide a partial view of the importance of involuntarily inherited factors. Upper bound estimates of IOp are much larger than their corresponding lower bound estimates. While the lower bound estimates of IOp account for up to 31\% of total inequality, the upper bound estimates account for up to 90.5\%, suggesting that IOp can be as high as total inequality of outcomes. Indeed, inequality of outcomes has a higher correlation with the upper bound estimates of IOp than with the lower bound estimates, both cross sectionally and over time.
    Keywords: Circumstances, equality of opportunity, equivalized household income, inequality, MLD index, upper bound estimate.
    JEL: D63
    Date: 2020–01
  22. By: Baumgarten, Daniel; Felbermayr, Gabriel; Lehwald, Sybille
    Abstract: Using rich linked employer–employee data for (West) Germany between 1996 and 2014, we conduct a decomposition analysis based on recentered influence function (RIF) regressions to analyze the relative contributions of various plant and worker characteristics to the rise in German wage dispersion. Moreover, we separately investigate the sources of between‐plant and within‐plant wage dispersion. We find that industry effects and the collective bargaining regime contribute the most to rising wage inequality. In the case of collective bargaining, both the decline in collective bargaining coverage and the increase in wage dispersion among the group of covered plants have played important roles.
    Date: 2020
  23. By: Wagner, Sander (affiliation not available); Boertien, Diederik; Gørtz, Mette (University of Copenhagen)
    Abstract: This paper describes trends in parental wealth homogamy among union cohorts formed between 1987 and 2013 in Denmark. Using high-quality register data on the wealth of parents during the year of partnering, we show that the correlation between partners' levels of parental wealth is considerably lower compared to estimates from earlier research on other countries. Nonetheless, parental wealth homogamy is high at the very top of the parental wealth distribution, and individuals from wealthy families are relatively unlikely to partner with individuals from families with low wealth. Parental wealth correlations among partners are higher when looking only at parental assets rather than net wealth, implying that the former might be a better measure for studying many social stratification processes. Most specifications indicate that homogamy increased in the 2000s relative to the 1990s, but trends can vary depending on methodological choices. The increasing levels of parental wealth homogamy raise concerns that, over time, partnering behavior has become more consequential for wealth inequality between couples.
    Keywords: marriage, assortative mating, wealth
    JEL: D31 J12 J60
    Date: 2020–02
  24. By: Thomas Bassetti (Department of Economics and Management, University of Padova and CICSE); Luca Corazzini (Department of Economic Sciences, University of Venice); Darwin Cortes (Facultad de Economia, Universidad del Rosario); Luca Nunziata (DSEA, University of Padova and IZA)
    Abstract: We present a two-country labor matching model to account for the existing, inconclusive empirical evidence on the relationship between immigration and crime. According to our model, inflows of relatively un- skilled immigrants negatively affect the labor market equilibrium and, therefore, sharpen criminal activities. On the other hand, inflows of relatively skilled immigrants boost economic activity and reduce the crime rate. Given this preliminary result, we endogenize the migration decision, showing that the host country’ s labor-market characteristics are crucial in determining the impact of migrants on crime rate. Countries characterized by low unemployment rates attract both skilled and unskilled immigrants, making the direction of the relationship between immigration and crime unclear. Countries with high unemployment rates attract only unskilled workers, thus favoring the emergence of a positive relationship between immigration and crime. We test the theoretical predictions of our model on a panel of 97 regions located in 12 European host countries built by combining the European Social Survey and the Eurostat Labor Force Survey. We identify a threshold level of unemployment rate above which the crime rate positively responds to immigration.
    Keywords: Immigration, Crime, Labor Market, Frictional Unemployment
    JEL: F22 J61 J64 K42
    Date: 2020–02
  25. By: Oleksandr Faryna (National Bank of Ukraine); Tho Pham (Department of Economics, University of Reading); Oleksandr Talavera (University of Birmingham); Andriy Tsapin (National Bank of Ukraine)
    Abstract: This paper examines the relationship between labour market conditions and wage dynamics by exploiting a unique dataset of 0.8 million online job vacancies. We find a weak trade-off between aggregated national-level wage inflation and unemployment. This link becomes more evident when wage inflation is disaggregated at sectoral and occupational levels. Using exogenous variations in local market unemployment as the main identification strategy, a negative correlation between vacancy-level wage and unemployment is also established. The correlation magnitude, however, is different across regions and skill segments. Our findings suggest the importance of micro data's unique dimensions in examining wage setting – unemployment relationship.
    Keywords: Phillips curve, wage curve, heterogeneity, micro data, online vacancies
    JEL: C55 E24 E31 E32
    Date: 2020–03–10
  26. By: Endrich, Marek
    Abstract: This paper analyzes the long-term impact of television on hate crimes in Germany. In the German Democratic Republic (GDR) foreign television served as a window to the world and exposed viewers to foreign influences. But certain parts of the GDR were excluded from receiving Western television due to geographical features. I argue that this resulted in long-lasting differences in the attitude towards foreigners. Using the spatial variation in signal strength as a natural experiment, the paper tests the effect of Western broadcasts on the rate of hate crimes. Municipalities with no access to foreign broadcasts exhibit a higher degree of xenophobic violence in the period of the migration crisis in Germany between 2014 to 2017. It shows that media can lead to preference changes that persist for a long time after the exposure.
    Keywords: hate crimes,refugees,natural experiment,media
    JEL: J15 K42
    Date: 2020

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